Sunday, March 22, 2009

The dollar has dropped in value in relation to other major currencies the most since 1985 when it was intentionally devalued. This drop was not intentional and may be/is an indicator of inflation.

What makes this particularly worry some to me is that recessions are supposed to be a natural dampener to inflation. My understanding is that you need to spark a recessions to stop hyper-inflation. If the dollar is declining or devaluing now, it does not bode well for when we recover. We may find ourselves forced to start another recessions to fix the inflation problems we are causing now.